Algorithmic Cues Reduce Perception of Price Discrimination
Let Your Algorithm Shine - The Impact of Algorithmic Cues on Consumer Perceptions of Price Discrimination
Tags: CUHK Business School, Hong Kong, Consumer Goods & Services
This study explores how algorithmic pricing cues can mitigate negative consumer perceptions of price discrimination in the hospitality and tourism sectors. The research shows that consumers react less negatively to price differences when they know the prices are set by algorithms, especially when the algorithm is presented as non-anthropomorphic. Applications include using algorithmic cues in revenue management systems to improve customer perceptions of fairness. The study suggests hospitality firms can disclose the use of algorithms to reduce complaints about price discrimination. These findings help improve customer relations while maintaining revenue optimization through dynamic pricing.
IP Type or Form Factor: Discovery & Research; Software & Algorithm
TRL: 5 - prototype ready for testing in intended environment
Industry or Tech Area: Hospitality & Tourism; Retail & E-Commerce
